Private Giving in Canada

Head Table Guests

John Sadler, Vice-President, Corporate Relations, Newcourt Credit Group and a Director, The Empire Club of Canada; Tony van Straubenzee, President, Rockhaven Consulting Inc. and a Past President, The Empire Club of Canada; Mary Lou Fallis, Distinguished Soprano, "Primadonna on a Moose"; Donald K. Johnson, Vice-Chairman, Nesbitt Burns; Georgia Prassas, President, Canadian Opera Company; Paul Hoffert, Chairman, Ontario Arts Council; Monty Larkin, Associate Director, Ireland Fund of Canada and an Honorary Director, The Empire Club of Canada; Peter Ferreira, OAC Student, Central Commerce School; The Rt. Rev. Arthur Brown, Past Bishop, York Scarborough Anglican Diocese of Toronto; Douglas W. Knight, Publisher, The Financial Post; and Anthony R. Graham, Senior Executive Vice-President, Levesque Beaubien Geoffrion.

Introduction by Julie Hannaford

During this past year, The Empire Club of Canada has been privileged to offer its podium to leaders, both national and international, in the fields of industry, science, education, and finance. Their addresses have heralded the words for the millennium. Clearly, we shall be a nation enriched by the values of instantaneous communications, and the challenges of global competition. We are in the midst of being transformed by the way we do business, the way we communicate, and the way we prepare our children to participate in the new global metropolis.

In our society, however, as we become increasingly defined by our ability to compete, communicate, and integrate our lives with the changes wrought by technology, science, and industry, we face perhaps a greater challenge. That is, that we as a society, will turn away from those values that ensure the very existence of a social organisation--that we shall lose our sense of community, and our sense of obligation and participation in the community, to the greater concern of winning at all costs. What defines us as a civilised society is not only our fiscal performance, nor our ranking amongst industrialised nations, but also the degree to which social interdependence, the sense of being obliged to give to one's community, constitutes an important value.

Where shall Canada be as we approach the millennium in terms of our status as a society that prospers not only because of its competitive energy, but because of its devotion to inter-dependence and the value of giving?

Colonel The Honourable Henry Newton Rowell Jackman, known perhaps better as "Hal" is known well as Ontario's 25th Lieutenant-Governor since Confederation, having served from December, 1991 until January 24, 1997, bringing greetings from the Queen to people, communities, and groups throughout Ontario. Today, The Honourable Hal Jackman brings to The Empire Club of Canada the concerns and issues that must accompany us as we march towards the millennium. Mr. Jackman's career is distinguished in business and politics, but perhaps his greatest distinction is his unswerving and passionate dedication to the life of Ontario and Canada in the community.

He has participated in charitable endeavours involving the arts, medicine, and learning as President of The Canadian Opera Company and The Ballet Opera House; as Chairman of the Atlantic Council of Canada; as Chairman of the Board of Trustees for the Canadian Red Cross Pension Fund; as Founding Chairman for the Regent Park Community Health Centre; as Vice-President for the Canadian Foundation for AIDS Research; as a Director for the Institute for Research on Public Policy, the Canadian Institute of Strategic Studies and the Ontario Heritage Foundation; and as Trustee for the Stratford Foundation Festival Fund, the Toronto Western Hospital, and the Art Gallery of Ontario. He is currently Chairman of the J.P. Bickell Foundation and The Council for Business and the Arts in Canada.

His honours and distinctions include the appointment as Founding Chairman of the Ontario Foundation for the Arts; the election to Chancellor of the University of Toronto, effective July 1, 1997; the conferring of no less than seven honorary degrees; the conferring of the Knight of Justice in the Most Venerable Order of the Hospital of St. John of Jerusalem and a Knight Commander of the Military and Hospitaller Order of Saint Lazarus of Jerusalem.

Our guest's distinctions, honours, and service include having been President of The Empire Club of Canada in 1971-72. Colonel Jackman's dedication to public service, and his passionate investment and reinvestment in the community, serve not only as a backdrop for his address today but as an example for those who wish to lead their business and their community into the millennium.

Ladies and gentlemen it gives me great pleasure to ask you to welcome a person who as Past President of The Empire Club needs very little introduction, because he did so many introductions--our guest of honour, The Honourable Hal Jackman.

Hal Jackman

Madam Chairman, today I would like to speak to you about philanthropy and charitable giving. This is the first time that I have had the privilege of speaking in any formal sense since I retired as Lieutenant-Governor of Ontario last January.

As you all know, the lieutenant-governor is a post which is rooted in our history and traditions. Ontario had a lieutenant-governor even before we had a city of Toronto. But as you know the power of the office has withered away over the years--usurped in my case by the likes of Bob Rae and Mike Harris so that the political role is now largely symbolic--the reading of the speech from the throne, giving royal assent, etc. Although these duties are important in reminding us of our traditions, they of course take very little time and would not, in my opinion, justify the position on their own.

Our country, however, has many other traditions. I am speaking now of citizenship, volunteerism and private philanthropy--all traditions which are well rooted in our history. It is the encouragement of these values that takes the great bulk of any lieutenant-governor's time.

So today I want to talk to you about citizenship and private philanthropy.

Over the past five years I have had the privilege of seeking what is best in our country. Most of the events the lieutenant-governor attends are volunteer recognition events, frequently marking the conclusion of some successful community endeavour. I have been continually impressed by the dedication and willingness of communities to help and be supportive of those in need. There are over four million volunteers in Canada contributing over one billion hours per year. Volunteerism and philanthropy are what makes Canada great. It is the essence of citizenship which defines us as a nation.

And yet when we choose to measure what we contribute it is perhaps inevitable that we make comparisons with our closest neighbour, the United States, whose history in so many ways parallels our own. Volunteerism, as measured by numbers of volunteers, is perhaps three times as great in the United States as it is in Canada. Charitable giving, according to the House of Commons Finance Committee, is also almost three times as great. Canadians give 0.7 per cent of their taxable income to registered charities. Ironically for higher income donors, that is those who make more than $100,000 a year, the comparison shows that Americans give four times as much as Canadians. Similarly in the corporate sector, charitable giving is more than twice as great, relative to our size. Foundation giving in this country is a pittance compared to the United States.

The question therefore that we must ask ourselves is: "Why? How is it that we seem to be less generous?" Some have said that it is the tax system in Canada which is not conducive to giving when compared to the United States. However, as I will mention later, this is all changing. If I had to speculate on a reason for this discrepancy it is because in this country we have unfortunately raised our expectations of government so high that we have forgotten that citizenship, as broadly defined, is much more important than government or public policy.

When I mention citizenship the first thing that of course comes to mind is political activity of some sort, participating in elections by the simple act of voting.

Every four or five years the politicians descend upon us, bombarding us with red books, blue books, green books which dutifully set out each candidate's 25-point plan for creating jobs, aiding the deserving, reducing the national debt, lowering taxes and balancing the budget--all dutiful compared with the alternative candidate's programme for doing the same.

Under this narrow definition, citizenship is necessarily an episodic, infrequent event, its chief purpose being to turn over to supposedly qualified experts the real business of public life, namely the designing and launching of public programmes of all sorts, to bestowing upon the unfortunate, the tender mercies of bureaucrats, policy experts and others who claim to be uniquely qualified to deal with our problems. Once a citizen has voted he is supposed to get out of the way and let the experts in Ottawa take over. Is it any wonder that Canadians today feel profoundly alienated from public life and that citizenship, understood as voting, holds so little appeal.

Genuine citizenship is much more. It involves active participation in the vast realm of human affairs known as civil society. And civil society encompasses all the institutions through which we express our interests and values. It includes what we do as members of our families, as students, as parents within our schools, as worshipful attendees of our churches and synagogues, faithful members of service clubs and neighbourhood associations and even organisations such as The Empire Club of Canada.

Citizenship occurs therefore not occasionally or infrequently. It occurs regularly and constantly in countless ways. Through countless subtle daily interactions citizenship gives form and substance to the everyday qualities and values without which life would be impossible--honesty, perseverance, self-restraint, personal responsibility and service to others by willingly sustaining those who may fall behind. Through our civil institutions, in short we grow into complete human beings.

In the United States more than 100 years ago, Alexis de Toqueville, in his "Democracy in America," expressed the classic expression of wonder and admiration at the incredible energy generated by America's vast array of civic institutions. Everywhere he looked he noted Americans had come together to tackle the problems that faced them in the undeveloped wilderness.

De Tocqueville was of course writing about the United States but was the situation of the early pioneers in Canada any different? In the province of Ontario when land was opened up to our settlers there were no roads, no schools, no hospitals, no government services of any kind. Our ancestors only survived because they accepted responsibility to look after each other. If someone was sick the neighbours would help to bring in the crops. They took turns in boarding the local school teacher. They gave of themselves to their community and they built a nation.

Unfortunately in Canada for some reason we are in danger of losing that spirit of community and citizenship. Instead of citizenship being a vigorous, multifaceted participation in civil society we are asked to pay through our taxes the cost of having others provide for us. We are asked in this country to remove the public business from the world of the active citizen to the centralised world of the professionalised bureaucracy. Our civil institutions are pressured to surrender authority and function to the professional elites of the central bureaucratic state.

Instead of trying to rejuvenate civil society, our government elites call for even more government programmes, more bureaucrats and professionals. Yet this however does not seem to solve our problems. In fact it may make them worse as government intervention undermines and weakens the authority of the very civil institutions that lie at the roots of our historical consciousness as a nation.

If we are not as generous as the United States it is not because on a personal level we are less, but simply because our government leaders have told us they would do more and therefore as Canadians we need to do less.

Those who would defend what I might call this Galbraithian commitment to the public purpose will of course point out advantages in our Canadian system.

We have a system of medicare in Canada which is generally felt to be far superior to anything that exists in the United States. We have a comprehensive system of unemployment insurance which provides a social safety net unequalled in our neighbour to the south. In Canada operating funds for hospitals and universities were, until recently, almost entirely provided for by government. Government grants to arts and culture, particularly to the CBC our public broadcasting network, are much greater in this country. Whether all these activities should be carried out exclusively by government or to what extent the private sector should play a role, is of course a matter of debate. Feelings run very high on these issues. What however becomes patently clear is that there is a hidden cost to large government programmes--because it is obviously apparent that there is a strong correlation between government support and the lack of private-sector support. Canadians naturally feel that if government assumes complete responsibility (and the politicians will never be adverse to taking the credit) they will be reluctant to supplement government spending with private-sector donations.

Thus we have in this country a "crowding out" effect. As government crowds in, the private sector will feel crowded out. Taxpayers are reluctant to make a voluntary contribution when they say they have already made an involuntary contribution through their taxes.

Canada has always struggled to define itself as a nation, but when we say that we are "kinder and gentler" than our neighbours to the south, I think there is now a very real danger in defining our national identity in terms of government programmes. That was perhaps justifiable during the 60s and 70s when the economy was expanding and we could show the rest of the world how progressive we were. The difficulty of course is that when the money runs out and government funding is no longer available, we run the risk that if we continue to identify our nationhood in terms of diminishing government programmes, then the justification for Canada itself may also diminish. It is valid to ask whether the current malaise that exists in our country, the feeling of alienation against Ottawa and governments in general, the rise of separatism and demands for local autonomy may directly relate to the current decline of the Canadian welfare state which seems no longer to be politically acceptable or financially sustainable.

The fact of the matter is that governments have no money. The only money they have is our money. And if the truth be known it is not even our money. It is borrowed money which must be repaid by succeeding generations. I am not sure how kind and generous we are or how good citizens we are if we ask our children and our children's children to pay for our consumption today.

Whatever you feel about government involvement in society, it is clear that if government programmes do not expand to meet our expectations then private charity must fill the gap.

I mentioned earlier that Canadians on average give 0.7 of one per cent of their incomes to charities. The comparable U.S. figure is almost three times as great. In dollar terms this translates into $5.8 billion that Canadians do not give, but perhaps should give, to charity. I am talking only about Canadian individuals. This figure excludes corporations and foundations. Almost $6 billion is a lot of money.

It would seem therefore that the purpose of both public and private policy as we approach the millennium should not be to complain about government cutbacks, but to take the necessary steps to ensure that the private sector can unleash the almost $6 billion which we do not give but which we must give if we are able to continue to call ourselves a generous people.

It has been estimated that government cutbacks to private charities have been in the neighbourhood of $500 million. Although $500 million is no small change, it is minuscule compared to the additional $5.8 billion that individual Canadians can give if they so choose. Necessity is always the mother of invention. Once our citizens know there is no big government there to do it for us, I am sure that they will react with the generosity of spirit which characterises every Canadian.

Already there are signs that the private sector is responding. At the University of Toronto some years ago it became apparent that increases in government funding would not be sufficient to maintain the excellence and quality of education of that great institution. Ten years ago they raised $10 million from the private sector. By 1994 it was up to $22 million, $33 million in 1995 and a staggering $85 million in 1996, almost nine times what it raised only 10 years previous.

The Council for Business and the Arts in Canada, of which I am Chairman, and which exists primarily to encourage private-sector support for the arts, surveys annually close to 200 not-for-profit arts organisations. Government funding for these organisations was $99 million last year and has not increased for five years.

Private-sector donations on the other hand grew to $65 millions, an increase of 50 per cent during the same period while government revenues remained constant.

Two years ago I initiated, along with the J.P. Bickell Foundation, the Lieutenant-Governor's Awards for the Arts. These awards go to institutions who conduct themselves on a sound financial basis and through fundraising and community involvement demonstrate a lessening dependence on government support. Last year we awarded $300,000 to 20 different arts organisations in Ontario, ranging from the Stratford festival to small, experimental theatres such as the Tarragon and the fringe of Toronto theatres. These 20 organisations experienced a total decline in government funding in the past two years of over a million dollars. However earned revenue and private-sector donations increased by $8.7 million or almost by nine times the decline in government funding. I am proud of these companies because it shows what can be done.

CJRT (Ryerson radio), a public broadcasting radio station which has a larger radio audience in Toronto than the CBC, had its last government grant eliminated last year. They met the challenge, raising the necessary funds from the private sector. They have every right to feel proud. The CBC, on the other hand, still gets close to $1 billion from the federal government and yet refuses or is unable to raise donations from the Canadian public. Of course the CBC apologists continue to complain about "cutbacks" and say they need even more public money so as to "define us as a nation." Well, it is not the CBC that defines us as a nation; it is the people of Canada through their countless individual acts of philanthropy, whether it be for CJRT, the University of Toronto or any of the multitude of worthy charitable causes that define us and give us our identity.

And as our private charities are raising more, there seems to be a change taking place in official attitudes to private philanthropy by at least some of our public-policy decision makers. This is obviously what has motivated the federal government in the last two budgets, increasing tax credits to those who would give to charities. For more than two generations Canada penalised charitable gifts, apparently feeling that expenditures by the governments were a preferable route towards building a great society. Now this attitude is changing.

In the United States for charitable giving you get a credit against taxable income of up to 50 per cent. In Canada the credit has now been increased from 20 per cent to 75 per cent, now much higher than the United States. Tax on gifts of appreciated property, such as shares in public companies, has been cut in half. Now for the first time, no one can honestly say that the official attitude towards giving as evidenced by our tax policy is less positive towards charities in Canada than it is in the United States.

This is a tremendous shift in public policy which has not been adequately covered by the press or understood by the Canadian public. Governments are not saying that hospitals, universities and the arts are not deserving of more funds. They are simply issuing a clarion call to the people of this country that if they feel more money should be spent in these areas, then they should give generously and the government will effectively match their gift by means of a credit on their taxes.

Now is the opportunity for Canadians to really prove that they are as kind and generous and humane and tolerant as we keep saying we are. Government may have cut off $500 million in grants to private charities, but they have created a tax climate which will allow private charities to access up to $6 billion in individual donations.

The age of big government programmes may be fast disappearing. In Canada the age of the volunteer is beginning to re-emerge. We will get back to that spirit of community which nourished us during our formative years.

And as dependence on governments declines and as private-sector donations increase, similarly the responsibility of boards will increase and I suspect organisations will be much better run. Government programmes are never as cost efficient or as good as community-run programmes. It is axiomatic--the greater the community involvement the greater and more direct the accountability.

We have in this country great traditions. Reliance on government is not a tradition. It is simply an act of dependence. Our tradition embraces freedom, self-reliance but also a commitment to help our neighbours who are in need.

Volunteerism is not just a characteristic of Canada; it is Canada. Canadians are clearly willing and eager to take control of their daily lives again. Canadians are ready for what might be called a "new citizenship." And for a great many Canadians it will mean that we will finally be getting our country back again.

The appreciation of the meeting was expressed by Tony van Straubenzee, President, Rockhaven Consulting Inc. and a Past President, The Empire Club of Canada.